Foreign Trade Zones allow importers to use Puerto Rico as a transshipment point to other Latin American and Caribbean countries without paying U.S. Customs duties and local excise taxes. Products remaining in the Foreign Trade Zone are technically outside U.S. territory. Importers can conduct light-manufacturing, exhibiting, repackaging, reshipping and distribution without paying duties or taxes if the merchandise is re-exported. If withdrawn for consumption/sale, either in part or whole, duties/taxes will be paid at that time, thus allowing for extended customer cash flow.
FTZ Frequently Asked Questions
What Is A Foreign-Trade Zone (FTZ)?
A restricted-access site in or adjacent to a Customs port of entry, but legally defined as outside the Customs Territory of the United States.
Operated by a public or private corporation, as authorized by the Foreign Trade Zone Board, and under the supervision of Customs.
A subzone is a special purpose site established for a limited purpose that cannot be accommodated within an existing FTZ.
References to "zone" and "FTZ" are generally considered to include either the general FTZ and any or all subzones authorized within the larger entity.
FTZ Program in Puerto Rico
Puerto Rico has three Foreign Trade Zones:
FTZ #7 – Puerto Rico Foreign Trade Zone; administered by Puerto Rico Industrial Development Company. It is the largest non-contiguous FTZ in the U.S., having 4,554 acres, 714 buildings with a total of 19.5 million square feet, located all around the Island.
FTZ #61 – San Juan Foreign Trade Zone; administered by Compañía de Comercio y Exportación. The zone is located in the Guaynabo area, on the northern coast of Puerto Rico.
FTZ #163 – administered by CODEZOL, C.L. The zone is located in the town of Ponce, on the southern coast of Puerto Rico.
Benefits of operating under the FTZ program in P. R. are unique. Merchandise “admitted” into the Zone is considered outside U.S. Customs Treasury Territory and, therefore, Puerto Rico. In addition, the Tax Incentives Act of 1998 provides a Flat Tax of 7% and no Property (CRIM) or “Patente” Municipal Taxes to products exported from an FTZ to Foreign destinations.
Other cash flow advantages offered by the FTZ program in Puerto Rico are:
- Deferred U.S. Duty Payment
- Deferred Puerto Rico Excise Tax Payments
- Inverted Tariff Opportunities
- No Duties or Excise Tax on goods subject to defects, damaged or expired
- Quarterly payment of Harbor Maintenance Fee
- Non dutiable of Labor Overhead and Profit
- No duties on returned foreign origin products
- On spare parts, no duty payment until used
NRI FTZ Group
Is the only Puerto Rican based Foreign Trade Zone-Program Consultants, having been instrumental in the development of most of the active Foreign Trade Zone Projects in the Island. Among the latest consulting projects of the Group is preparing FTZ workshops for GUÍA Group, an independent, non-profit organization that represents most of the exclusive distributors and automobile brand subsidiaries in Puerto Rico. Our FTZ Group has served as the intermediary of GUÍA Group in most of their matters related to Customs.
Our FTZ Group consists of a team of experts to aid on the development and operation of Foreign Trade Zones:
- Feasibility Studies & Savings Analysis
- Physical Security Requirements
- Engineering Services
- FTZ Board Application
- FTZ Operations Manual Preparation
- FTZ Personnel Training
- Electronic Record-keeping Assessment and Implementation
- Pre Customs FTZ Audit
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